At least two Techstars companies take in some cash before Demo Day

The model of Techstars Demo Day as the first chance for needy startups to reach into the wallets of eager investors got disrupted this year, with at least two of 10 companies, NexLP and Telnyx, walking into Wednesday’s event with venture-capital cash in the bank.

And a third company, InRentive, suggested it has funding on the way.

Techstars Chicago co-founder Sam Yagan said he could remember only one other company securing funding before Demo Day. That was BabbaCo — acquired earlier this year by Massachusetts-based Barefoot Books — in 2011, Yagan said.

The annual Techstars Demo Day allows companies to pitch their businesses after working in summer residence for 13 weeks at Techstars, based at the 1871 tech incubator. Wednesday’s event featured a crowd of about 400 entrepreneurs and investors at the House of Blues.

NexLP founder Jay Leib drew cheers when he announced that the company, which offers analytics and data visualization technology to reduce legal discovery and investigative costs, had secured $2 million in funding. Leib said the backers are Chicago-based KGC Capital LLC, and Florida-based Six/Ten LLC.

Telnyx, a Web-based voice communications company, announced funding from the Pritzker Group, Chicago Ventures and Corazon Capital LLC, a fund backed by Yagan. The company did not disclose the amount.

And at InRentive, chief technology officer Josh Childs said the company, a marketing and analysis platform for rental properties, will make “a funding related announcement next week.”

Perhaps he was looking to warm his hands around the fire of optimism that seems to burn at Chicago’s annual Techstars Demo Day. Or maybe Cubs owner Tom Ricketts thought one of the rookie companies was developing an app for winning baseball.

“We’re going to get a relief pitcher out of this room,”...

(John Carpenter)

Chicago-based WeDeliver already had funding when it joined this year's Techstars class, thanks to an $800,000 round from local investors this year.

Yagan said the news shows that the companies coming to Techstars are more fully developed, already working to secure funding rather than simply developing their ideas and skills at the accelerator. He also said funders aren’t waiting around either.

“In the early days, Demo Day was a kind of a coming out party,” he said. “Now investors are getting in with these companies earlier in the summer.”

Techstars Chicago accepts 10 companies each year. This year they were chosen from among more than 700 applicants, said Techstars Managing Partner Troy Henikoff. The companies receive 13 weeks of in-residence training and mentoring, as well as $18,000 in seed funding. Techstars in return receives 6 percent ownership in the companies.

Yagan said he thinks this year’s Demo Day class might be the strongest of the event’s five years. The reigning champ, he said, was the 2010 class, when Techstars was known as Excelerate Labs. That year included FanGo, a mobile ordering platform that was acquired by GrubHub, FeeFighters, acquired by Groupon in 2012, and GiveForward, Yagan said.

“It’s too early to tell, of course,” Yagan said. “But this year’s group is as strong out of the gate as we’ve ever been.”